Louis J. John, Esquire
Mark R. Lane, Esquire
Joseph J. John, Esquire Melvin L. Moser, Esquire
John Law Offices Scott A. Andrews, Esquire
Wheeling, West Virginia Gorr, Moser, Dell & Loughney
Attorneys for Appellants Pittsburgh, Pennsylvania
Attorneys for Appellee
The Opinion of the Court was delivered PER CURIAM.
JUSTICE McGRAW dissents.
The question of whether an insured has substantially prevailed against his
insurance company on a property damage claim is determined by the status of the
negotiations between the insured and the insurer prior to the institution of the lawsuit. Where
the insurance company has offered an amount materially below the damage estimates
submitted by the insured, and the jury awards the insured an amount approximating the
insured's damage estimates, the insured has substantially prevailed. Syllabus Point 2,
Thomas v. State Farm Mutual Automobile Insurance Company, 181 W. Va. 604, 383 S.E.2d
This is an appeal by Callen Bryan and Charlotte Bryan, his wife, from an order
of the Circuit Court of Ohio County granting the appellee, Westfield Insurance Company,
summary judgment in an action brought by the appellants to recover counsel fees and other
damages from the appellee for the failure of the appellee to settle an insurance claim
promptly and in good faith. The circuit court granted Westfield Insurance Company
summary judgment on the ground that the appellants had not substantially prevailed in their
underlying action and that, as a consequence, the appellants were not legally entitled to the
fees and damages which they sought. On appeal, the appellants claim that they did
substantially prevail, or in the alternative, the evidence shows at the very least there was a
basis for a jury to conclude that they had substantially prevailed, and that under the
circumstances, summary judgment was inappropriate.
The appellant, Callen Bryan, was injured in an automobile accident on May 15,
1996, when his vehicle was struck by a vehicle being negligently operated by Albert
Dobrovich. Mr. Dobrovich had an insurance policy with Dairyland Insurance Company,
which had a policy limit of $20,000. The appellants, Mr. Bryan and his wife, maintained an
insurance policy with the appellee, Westfield Insurance Company, which contained an
underinsured motorist provision with a policy limit of $300,000.
Following the accident, the appellants filed a civil action in the Circuit Court
of Ohio County against Tom and Albert Dobrovich, the operator and owner of the vehicle
which injured Callen Bryan. Approximately three months later, on September 4, 1997, the
Dobroviches' insurance carrier, Dairyland Insurance Company, offered to settle the
appellants' claim for $20,000, the limit of the Dobroviches' policy. Because the appellants
had underinsurance coverage with their own insurance company, the appellee, Westfield
Insurance Company, the appellants sought and obtained the consent of Westfield Insurance
Company to the settlement. The consent was provided by letter dated September 16, 1997.
After settling with the Dobroviches and Dairyland Insurance Company, the
appellants requested that their own carrier, Westfield Insurance Company, pay them an
additional sum under their underinsured motorist coverage. Initially, they did not demand
a particular dollar amount, and instead of settling immediately, counsel for Westfield
Insurance Company requested that a complete MRI report be provided, as well as certain
other medical records.
In spite of the fact that the requested medical records had not been provided,
on October 21, 1997, Westfield Insurance Company offered to settle the appellants' claim
for $15,000. The appellants rejected that offer.
Subsequently, on November 7, 1997, Westfield Insurance Company served
discovery upon the appellants seeking among other things medical records relating to Callen
Bryan's injuries, and on December 8, 1997, specifically requested Callen Bryan's complete
On March 12, 1998, Westfield Insurance Company again requested medical
records, and on March 20, 1999, presented a motion to compel the production of the records.
Following the filing of the motion to compel, the appellants' counsel indicated that there
were no past medical records and that a new MRI showed nerve impingement stemming from
Callen Bryan's injury.
After receiving this information, Westfield Insurance Company, on March 20,
1998, raised its settlement offer to $47,500. The appellants rejected this offer on April 6,
1998, and on May 5, 1998, for the first time made a specific demand, a demand for $200,000.
Three days later, on May 8, 1998, Westfield Insurance Company made a counteroffer for
$75,000. On May 12, 1998, the appellants rejected Westfield's $75,000 offer, and demanded
$180,000. On May 18, 1998, the parties agreed to settle for $132,000.
In pursuing the sums to which they believed they were entitled due to their
underinsured motorist coverage, the appellants sued their carrier, Westfield Insurance
Company, claiming, in effect, that Westfield Insurance Company had not acted in good faith
in attempting to effectuate a prompt, fair, and equitable settlement of their claim. Westfield
Insurance Company ultimately moved for summary judgment in this action, and by order
dated June 9, 1999, the circuit court granted the motion. In that order, the court found that:
The uncontroverted evidence in this case is that it was March 12, 1998 when Dr. Kelly's MRI, for the first time, revealed that there was nerve impingement of the bulging discs previously reported on other MRIs. Once the defendant had the medical report, it was able to determine not only liability but also the damages and from that point forward it was obligated to make a prompt and fair offer of settlement. The record is clear that within eight days of receiving that information from the plaintiff, the defendant more than tripled its offer from $15,000 to $47,500. Some 35 days later, the plaintiff made its first demand for a set figure, which was $200,000. The defendant replied within three days by making an offer of $75,000. The plaintiff responded with a counter proposal on May 12 of $180,000 and six days later on May 18 the matter settled for $132,500.
Based on the evidence, this Court cannot find that the defendant failed to meet its duty to promptly conduct a reasonable investigation of the policyholder's loss based on all available information. The Court further finds that this action was not settled for an amount equal to or approximating the amount claimed by the insured when they made their initial demand of $200,000.
It is from this ruling that the appellants now appeal, claiming that they
ultimately substantially prevailed, and that under the law, they are entitled to attorney fees
and damages because of the failure of Westfield Insurance Company to settle their
underinsurance claim promptly.
In Burgess v. Porterfield, 196 W. Va. 178, 469 S.E.2d 114 (1996), this Court
indicated that a challenge to a trial court's determination that a plaintiff has or has not
substantially prevailed in a case such as the one presently before the Court, should be
reviewed by this Court under an abuse of discretion standard.
The question of whether an insured has substantially prevailed
against his insurance company on a property damage claim is
determined by the status of the negotiations between the insured
and the insurer prior to the institution of the lawsuit. Where the
insurance company has offered an amount materially below the
damage estimates submitted by the insured, and the jury awards
the insured an amount approximating the insured's damage
estimates, the insured has substantially prevailed.
In the present case, the evidence shows that on October 21, 1997,
approximately six months prior to the actual settlement of this case, Westfield Insurance
Company offered to settle the Bryans' claim for $15,000, considerably less than the limit on
the Bryans' underinsured motorist coverage. That offer was made, however, before
Westfield Insurance Company was totally informed of the nature of Callen Bryan's medical
condition, and a considerable time before Westfield Insurance Company was aware of the
fact that Callen Bryan had suffered nerve impingement as a result of the accident. On March
20, 1988, after receiving actual medical records, Westfield Insurance Company upped its
settlement offer to $47,500.
The Bryans did not actually demand a specific amount for their claim until May
5, 1998, when they demanded $200,000. Within three days, Westfield Insurance Company
offered $75,000. On May 12, 1998, the Bryans reduced their demand to $180,000, and
finally, on May 18, 1998, the case settled for $132,500.
A fair reading of the record in this case shows that Westfield Insurance
Company did not have the complete medical facts relating to the Bryans' claim until the
middle of March 1998. The company promptly made a settlement offer, and the Bryans did
not make their first specific demand until May 5, 1998. Less than two weeks later, the case
settled for $132,500. The amount which the Bryans ultimately received was only 66.25
percent of what they initially demanded.
Westfield Insurance Company did settle the appellants' claim within two weeks
after the appellants made a specific demand, and, in fact, Westfield Insurance Company
began negotiating promptly by making the Bryans a counteroffer within three days after the
Bryans made their first specific demand. Further, it appears that negotiations continued until
an ultimate settlement was reached, and the ultimate settlement was one-third less than the
Bryans had initially demanded.
In view of the nature of the record, this Court cannot conclude that the trial
judge abused his discretion by concluding that the Bryans had not substantially prevailed and
by awarding Westfield Insurance Company summary judgment in the present case.
The judgment of the Circuit Court of Ohio County is, therefore, affirmed.